Empowered by the SARFAESI, Act, 2002, the role of Banks have changed. From holding the pride of building the economy in the past era, now Banks have narrowed down their role and activities as a strict and severe usual `moneylender'.
The Banks have deviated from the avowed purpose, when they were nationalised i.e. building the national economy - to be the engines of growth. Now the bank is like any other entity only interested in making profit irrespective of their business practices. Presently industries have stopped taking loans from banks owing to this big risk of SARFAESI. But Banks have cleverly identified the innocent public by offering housing mortgages. These innocent people sell all their other gold ornaments, etc. to settle the dues with the Bank and thereby save their properties. And the Banks have a wonderful time owing to their power over their borrowers and the SARFAESI system.
No prudent person would approach a Bank for any kind of loan or advance - as they will thereby be exposed to great risks with regard to their properties. By adopting this role, the Banks need not be called anymore as banks - they may rather be termed `Moneylenders' - with the wickedness, greed and inhumanity associated with the term.
At least the judiciary should have provided some relief to borrowers, but one finds that the judiciary more often than not assists the Moneylenders in recovering the full dues with interests, costs and expenses.
It is time to wonder how this could be `equality as enshrined in Art.14 of Const. of India'. To avert this criticism the courts' call the Moneylenders' money as `public money' and extend all possible aid to recover the same. Let me cite an example to negate this concept - Let us say A borrows loan of Rs.10 lakhs from M a moneylender (bank). He in turn invests in his business rotation. In one business transaction one Customer C defaults payment of Rs. 10 lakhs. Thereby A's account with M becomes NPA. Now A sues C for the money due to him, and the bank M proceeds against A under SARFAESI.
Certainly A cannot get the money from C as speedily as M proceeds against A. In this case A would have to lose his property given as `secured asset' and meanwhile proceed with a long drawn battle with C. in this instant case, the defaults are similar, but A suffers for no fault of his. If only A had the same power as M, the Bank he would save his property. Hence, there is gross inequality in similar kinds of transactions.
I do not know why our superior courts close their eyes to these kinds of real possibilities that occur in day to day life and confer too much power under the SARFAESI. It is ripe time that the effects of the Act are taken into consideration and necessary modifications or repeal of the Act is done for the welfare of the society and even reputation of the Banks.
Otherwise, people will lose the goodwill attached to Banks and will hesitate even to deposit money in these institutions as by then almost the entire citizenry would have reeled in pain owing to the Moneylenders' acts.
This is my personal view and article is written based on my own independent views.